Final answer:
The new Economic Order Quantity (EOQ) cannot be precisely calculated without further details on ordering and holding costs. However, with a 50% increase in demand, the EOQ would generally increase and be larger than the original 400 units due to the nature of the EOQ formula.
Step-by-step explanation:
When there is a 50% increase in demand, the Economic Order Quantity (EOQ) will also change. The EOQ is calculated using a formula that takes into account several factors, including demand, ordering costs, and holding costs. While the exact new EOQ cannot be determined without additional information on these costs, as a rule of thumb, an increase in demand typically leads to a larger EOQ.
This is because the EOQ formula involves the square root of the product of two times the demand and the ordering cost, divided by the holding cost. Therefore, when the demand increases, the EOQ is affected by the square root of the increase in demand, which, in this case, would result in a new EOQ greater than the original 400 units.